By Suzanne Herel
VALLEY FORGE, Pa. — Months of debate over whether to create “historic” capacity rights for some unnamed load-serving entities in PJM got a face last week when a small contingent from the Illinois Municipal Electric Agency showed up at a meeting of the Market Implementation Committee to lobby for the changes.
The Tariff amendments would allow LSEs to use generation resources outside of their locational deliverability areas (LDAs) to meet their internal resource requirements if that external capacity agreement was in place before June 1, 2007, when PJM implemented its Reliability Pricing Model. (See Stakeholders Skeptical of PJM Proposal for ‘Historic’ Capacity Transfer Rights.)
Stu Bresler, PJM’s vice president of market operations, who had proposed the change, had not identified any potential beneficiaries, although it was clear one would be IMEA.
In January, IMEA failed to win approval from the Federal Energy Regulatory Commission to continue using capacity resources outside of the Commonwealth Edison LDA to meet its internal resource requirement in serving its Naperville, Ill., load. (See FERC Denies IMEA Request for Extended Waiver on Capacity Obligation.)
Last week, IMEA representatives came to Valley Forge state their case.
“We wanted to put a face on this and give you our answers,” said Troy Fodor, IMEA vice president and general counsel, who was joined by two colleagues.
“From our perspective, we’re not asking for a preference. We got the long-term transmission rights as part of going out and building brand-new plants,” he said. “We believe that since we have the firm long-term transmission rights that the transfer capability is ours. So, to the extent that it’s being taken and allocated out, and we’re getting a higher internal resource requirement, it feels like you’re taking our stuff.”
If it is a preference, he added, it’s one that IMEA feels it has justified by investing “a billion dollars” in plants to deliver load in ComEd.
In an interview after the meeting, Fodor explained the trip. “We need a solution,” he said. “If this process is going to fail, we have to start working at the next step. The reason we’re here is it looked like [talks] were going in the wrong direction.
“We have a good story,” he said. “We think we have a legitimate story.”
Bresler told the committee that historic capacity resources would not exceed the value at which they were initially established — and if the load should decrease, it would never go back up.
Market Monitor Joe Bowring, who has opposed Bresler’s proposal, said he continued to be concerned that the approach is too broad. “We are going to attempt to work with PJM and IMEA to see if there’s a way to come up with a more targeted approach,” he said.
PJM estimates 1,037 MW of historic external resources would qualify under its proposal: 122 MW in the DOM zone, 533 in COMED, 261 in AEP and 121 in DAY.
Bresler said the committee would see a first reading on proposed Tariff changes in June.